Ideology and Retrospection in Electoral Responses to the Great ...

Ideology and Retrospection in Electoral Responses to the Great Recession

Larry M. Bartels

Working Paper: 04-2013 Research Concentration: Elections and Electoral Rules

Chapter 7

Ideology and Retrospection in Electoral Responses to the Great Recession1 Larry M. Bartels

The global economic crisis triggered by the financial meltdown of 2008 provides a dramatic setting in which to explore perennial questions of democratic accountability. Dozens of incumbent governments around the world faced their voters under conditions of significant economic distress. How did voters respond to these opportunities to help steer the ship of state through the squall? Did electorates evaluate the performance of their elected leaders on the basis of sober-minded assessments of the economic situation? Did they compare the ideologies and proposals of “ins” and “outs” and communicate meaningful preferences regarding the future course of public policy? Was there a global shift of ideological views to the left or to the right in response to a broadly shared understanding of the nature of the crisis and appropriate governmental responses? Or did voters simply and uncritically punish incumbents wherever and whenever times were hard? In hopes of shedding some light on these questions, I provide a broad comparative analysis of 42 elections in 28 OECD countries in the period just before, during, and after the Great Recession (from 2007 through 2011). By focusing on common patterns across these diverse electoral settings, I of course ignore much important detail regarding economic conditions, 1

I am grateful to Christopher Achen, Christopher Anderson, Nancy Bermeo, Mark Kayser, Johannes

Lindvall, Markus Prior, Steven Rogers, and participants in the Oxford conference on “Popular Reactions to the Great Recession” and the Vanderbilt Political Behavior Workshop for helpful discussions and comments on early versions of this chapter. The work reported here was supported by the Princeton Institute for International and Regional Studies’ research cluster on “The Politics of Economic Crisis” and by Vanderbilt University’s May Werthan Shayne Chair in Public Policy and Social Science.

2 policy choices, party strategies, and voting behavior in particular countries. My hope is that this inevitably superficial comparative analysis will provide a useful starting point for more detailed studies, which may in turn suggest modifications and elaborations of the empirical generalizations proposed here. In the meantime, I offer a few very brief case studies of specific elections; they are intended not as evidence in their own right, but as illustrations of the empirical generalizations—and of some of the additional complexities shaping specific election outcomes.

Ideology or Retrospection? In the past half-century, political scientists have developed two distinct models of electoral accountability. In the first of these models, voters are supposed to weigh the ideological commitments and policy platforms of competing parties or candidates and vote so as to further their own policy preferences (for example, see Downs 1957; Enelow and Hinich 1984; for a critique, Stokes 1963). The notion that elections provide meaningful judgments on the ideologies and policies of democratic governments is an enduring—and, for many citizens and political observers, reassuring—tenet of democratic faith. Thus, analysts called upon to explain or interpret specific election outcomes often do so in ideological terms. The fall of a left-wing government is taken to imply that the electorate has shifted to the right; conversely, its reelection is interpreted as evidence of a continued attachment of the masses to the principles and policies of socialism. While this way of thinking about electoral politics is common among sophisticated political observers in modern democracies, it may be less compelling than it seems. As Converse (1964, 219) put it in a classic essay challenging the empirical veracity of the model, “While it may be

3 taken for granted among well educated and politically involved people that a shift from a Democratic preference to a Republican one probably represents a change in option from liberal to conservative, the assumption cannot be extended very far into the electorate as a whole.” An alternative model of electoral accountability dispenses with the arguably unrealistic assumption that voters are attentive to ideological commitments and policy promises; instead, they are merely expected to assess the general performance of the incumbent government, decide whether it is satisfactory or unsatisfactory, and vote accordingly to retain or replace the incumbents (for example, see Key 1966; Fiorina 1981; for a critique, Achen and Bartels 2009). This so-called retrospective voting model is generally less prominent in sophisticated political discourse than the ideological model; however, it has come to play an increasingly prominent role in scholarly analyses of electoral politics. For example, in a recent paper on the latest election in Germany, Rohrschneider, Schmitt-Beck, and Jung (2010, 18) wrote that voters in competitive party systems “have been socialized to change governments when they are unhappy with the economic performance of a party because they (rightly or wrongly) have come to believe that this will in due course help to improve the economy under a new set of governing parties.” David Mayhew (2002, 161) put it more succinctly: “academics have tended to dismiss campaign slogans of the past like ‘the full dinner pail’ and ‘a chicken in every pot’ on the grounds that something deeper must have been going on in these elections. But perhaps it wasn’t.” These two alternative models of electoral accountability have both received substantial scholarly attention, but they have less often been considered in juxtaposition. As a result, it is easy for observers to mistake one sort of electoral response for the other. Thus, for example, Achen and Bartels (2005) suggested that the American electorate’s response to the Great Depression in the 1930s was much less ideological than is often supposed. Employing state-level

4 data on income growth, they showed that Franklin Roosevelt’s historic landslide in 1936—the pivotal electoral event in what came to be called the New Deal era—was heavily concentrated in areas where incomes happened to be growing in the year of the election. If the recession of 1938 had occurred two years earlier, they suggested, Roosevelt would probably have been a one-term president and the “New Deal era” would have amounted to a brief interlude in American political history. In support of this interpretation, Achen and Bartels (2005, 2) noted “the impressive consistency with which electorates around the world deposed incumbent governments during the worst days of the Depression, regardless of their ideologies.” They argued that “what looks to the American eye like a triumph of both democratic responsiveness and Democratic ideology may instead be an illusion produced by a specific configuration of election dates, partisan alterations, and economic vicissitudes in a world where policies are, in fact, largely irrelevant and voters are blindly and myopically retrospective.” Murillo, Oliveros, and Vaishnav (2010) offered a parallel reinterpretation of the rise of the left in Latin America in the first decade of the new millennium. They argued (2010, 87-88) that the “rising tide of leftist political movements across Central and South America” discerned by “journalists, policy makers, and academics” was primarily due not to “structural conditions, such as poverty and inequality,” “globalization and disenchantment with neoliberal market reforms,” or a “crisis of representation,” but to “the disenchantment of voters with underperforming rightwing governments.” Analyzing the outcomes of 106 elections in 18 countries over a period of three decades (1978-2008), they found that voters routinely punished incumbents of both the right and the left for high levels of price inflation. Moreover, the estimated sensitivity of voters to economic performance was fairly symmetric; a ten-fold increase in prices in the year before

5 the election was associated with a decline of about eight percentage points in the expected vote share of left-wing governments and with a decline of about five percentage points in the expected vote share of right-wing governments. The impact of economic conditions on election outcomes has been a prime focus of investigation by scholars of retrospective voting, first in the United States (Kramer 1971; Tufte 1978) and more recently in a wide variety of other countries (Lewis-Beck 1988; Anderson 1995; Duch and Stevenson 2008). Economic conditions have the virtue of being (relatively) easy to measure, and their impact has proved to be sufficiently large and consistent to provide powerful leverage for explaining and predicting election outcomes (Rosenstone 1983; Hibbs 2006). While the general importance of economic voting is widely recognized by scholars of electoral politics and public opinion, the precise nature and normative significance of the phenomenon are matters of debate. At one extreme, theorists have developed elaborate models of economic voting in which voters make sophisticated calculations regarding the implications of observed economic performance for their future utility streams (Hibbs 2006). For example, Duch and Stevenson (2008, 339) posited that “Voters observe shocks to the macro-economy but cannot observe the mix of exogenous and competence components that comprise these shocks. Voters do, however, know the variances of the distributions of these different kinds of shocks and so are able to solve a well-defined signal-extraction problem that produces a competence signal.” At the opposite extreme, scholars have suggested that retrospective voting is often short-sighted (Achen and Bartels 2004; Bartels 2008, chapter 4) and that voters routinely punish incumbents for such uncontrollable “failures” as droughts, shark attacks, and lost football games (Achen and Bartels 2009; Healy, Malhotra, and Mo 2010). Analyses like these raise the question of whether

6 elections provide meaningful retrospective accountability, much less ideological or policy “mandates.”

The Impact of Economic Conditions To what extent have electoral responses to the Great Recession been directly shaped by economic conditions? Table 1 lists 42 parliamentary elections conducted in 28 OECD countries between 2007 and 2011. For each election, the table records the ideological profile of the incumbent party, total real GDP growth in the four quarters leading up to the election, and the increase or decrease in the incumbent party’s vote share by comparison with the previous election.2 In most cases the “incumbent party” is the largest party in the government; however, in seven cases where coalition governments included two roughly equal partners I have totaled the vote gains or losses for both major incumbent parties.3

2

Election results are for the lower house of each country’s national parliament. In presidential systems, I

treat the president’s party as the incumbent party. I exclude elections in Belgium in 2007 and 2010 (a prolonged constitutional crisis produced a series of caretaker governments), the Czech Republic in 2010 (an interim government of experts nominated by both major parties had replaced the previous incumbent government 14 months before the election), Korea in 2008 (partisan turnover in a presidential election four months earlier blurred responsibility), and Switzerland in 2007 and 2011 (all major parties participated in a plural executive). Election data are from NSD European Election Database, supplemented with various national sources for non-European countries. 3

Parallel analyses focusing solely on vote gains or losses for the prime minister’s party produce results

generally similar to those reported here. Coalition governments include Estonia in 2007 (the Centre Party received 25.4% of the vote in the preceding election, while the Reform Party received 17.7% but included the incumbent prime minister), Finland in 2007 (Centre Party with 24.7% and Social Democrats with 24.5%), Austria in 2008 (Social Democratic Party with 35.3% and People’s Party with 34.3%), Israel in 2009 (Kadima with 22.0% and Labor with 15.1%), Germany in 2009 (CDU/CSU with 35.2% and SPD

7 [Table 1] The elections in Table 1 provide the primary data for my analysis. The basic relationship between economic growth and the outcomes of these elections is displayed in Figure 1. For each election, the figure shows how changes in the incumbent party or coalition’s electoral support from the previous election varied with the rate of GDP growth in the year leading up to the election. [Figure 1] The relationship between economic conditions and election outcomes evident in Figure 1 is represented statistically in the first column of Table 2, which reports the results of a bivariate linear regression of changes in incumbent party vote shares on real GDP growth in the four quarters leading up to the election; the corresponding regression line is plotted in Figure 1. These results imply that each additional percentage point of real GDP growth was associated with an increase of about 1.2% in the incumbent party’s expected vote share. [Table 2] The second column of Table 2 reports the results of a regression model including two distinct economic variables—real GDP growth in the year leading up to the election and real GDP growth in the year before that (cumulating growth in quarters five through eight before the quarter in which the election occurred). This model does a better job of accounting for election outcomes, reducing the standard error of the regression by about five percent. The results suggest that voters probably attached significant weight to economic performance over a two-year

with 34.2%), Netherlands in 2010 (Christian Democrats with 26.5% and Labour with 21.2%), and Finland in 2011 (Centre Party with 23.1% and National Coalition Party with 22.3%).

8 horizon. However, the estimated weight attached to earlier economic growth is only a little more than half the estimated weight attached to election-year growth, suggesting that voters significantly discounted earlier growth in favor of growth in the quarters immediately preceding the election (Achen and Bartels 2004; Bartels 2008, chapter 4). This relationship is presented graphically in Figure 2.4 [Figure 2] The third and fourth columns of Table 2 present the results of additional regression analyses probing the impact on election outcomes of relative economic growth rates. I calculated relative GDP growth by subtracting from each country’s growth rate in each quarter the OECD-average growth rate in the same quarter. This would be a more appropriate measure of economic conditions if voters in each country were comparing their own economy’s performance against that of other OECD economies—in effect, making rough allowance for the impact of global economic forces on national performance (Kayser and Peress 2011). However, the statistical results provide little evidence that voters did use the global economic climate as a benchmark in assessing the performance of their own governments. The regression analysis employing relative GDP growth rates (reported in the third column of Table 2) accounts for election outcomes rather less well than the analysis (in the second column) employing unadjusted growth rates. Even the analysis reported in the fourth column, which includes both relative and absolute growth rates, does not improve upon the fit of the simpler model employing only absolute growth rates. While the parameter estimates for the more complex specification are too imprecise to rule out the 4

“Weighted GDP growth” in Figure 2 combines growth in quarters 1-4 before the election and growth in

quarters 5-8 before the election, each weighted by the associated parameter estimate in the second column of Table 2: (1.02×(ΔGDP(1-4Q))+.56×(ΔGDP(5-8Q)))/(1.02+.56).

9 possibility that relative economic performance had some independent impact on election outcomes, the weight of the evidence—such as it is—clearly suggests that absolute growth rather than relative growth is what mattered to voters.5 The analysis presented in the fifth column of Table 2 adds another measure of economic performance, the unemployment rate at the time of the election.6 The estimated effect of unemployment on the incumbent party’s vote share is negative, but rather modest, and incorporating it does little to improve the statistical fit of the model. Additional analyses (not shown) failed to uncover any greater effect of unemployment among the 16 cases with left-ofcenter governments, which might be more likely than right-of-center governments to be punished for high unemployment.7 Nor did changes in unemployment in the year leading up to each election have any reliable electoral impact, once GDP growth was taken into account.8 The sixth column of Table 2 reports regression results for the same model as in the second column, but excluding the three biggest outliers in Figures 1 and 2—the elections in Hungary in 2010 and Ireland and Slovenia in 2011. In the first two cases, the effects of poor economic performance were compounded by draconian austerity programs and by major political scandals, producing disastrous electoral losses for the incumbent parties—the Socialist Party (MSZP) in 5

I also looked for effects of relative economic performance within the narrower confines of the Euro area

(using the average growth of Euro-area economies over the same period as the relevant benchmark) and among the “old OECD” economies (excluding the United States) studied by Kayser and Peress (2011). In both cases, election results were more strongly related to absolute economic performance than to relative economic performance. 6

“Labour Force Statistics (MEI): Harmonized Unemployment Rates and Levels (HURs),” quarterly data

seasonally adjusted, OECD (http://stats.oecd.org). 7

The estimated effect of unemployment was −.53 (with a standard error of .44).

8

The estimated effect of the change in unemployment was −.93 (with a standard error of .81).

10 Hungary (−23.9%) and Fianna Fail in Ireland (−24.1%). In Slovenia, a no-confidence vote in the National Assembly triggered an early election, and the incumbent Social Democrats lost twothirds of their previous electoral support (−20.4%) to a brand new party, Positive Slovenia, led by the popular mayor of Ljubljana. Excluding these cases from the analysis reduces the estimated impact of GDP growth in the year before the election by seven percent, while the estimated impact of GDP growth in the preceding year is cut in half; nevertheless, it is clear from these results that the apparent impact of economic conditions on election outcomes is not simply an artifact of rare conjunctions of economic and political crises.9 Taken as a whole, the regression analyses in Table 2 provide empirical support for a rather simple model of retrospective voting. Citizens in OECD countries generally rewarded their governments when their economies grew robustly and punished their governments when economic growth slowed.10 The magnitude of these rewards and punishments was substantial, with differences in expected vote shares of 24 percentage points over the observed range of GDP growth.

9

Omitting these three outliers from the analysis of relative growth reported in the third column of Table 2

reinforces the conclusion that relative growth matters less than absolute growth. The adjusted R2 statistic falls from .29 to .15, whereas the comparable statistic for the analysis of absolute growth only falls from .35 (in the second column of Table 2) to .33 (in the sixth column). The absolute growth model clearly fits these data better than the relative growth model. 10

The parameter estimates in Table 2 imply that real GDP growth of about 4.5% per year would be

required for an incumbent government to maintain its vote share. The average real GDP growth rate in OECD countries before the onset of the Great Recession (in 2005, 2006, and 2007) was a bit less than 3%. This discrepancy suggests that, even in normal economic times, incumbent governments are likely to experience a gradually erosion of electoral support.

11 Not surprisingly, these statistical relationships between economic growth and election outcomes leave a great deal of electoral politics unaccounted for. Much of this residual variation presumably reflects the impact of a wide array of other considerations voters brought to the polls—social concerns, wars and international crises, evaluations of the competence and charisma of party leaders, stirring speeches, scandals, and on and on. In addition, the impact of economic conditions themselves may have varied significantly from one election to another due to variation in “the extent of political (or electoral) control of the economy; the concentration and distribution of policy-making responsibility over parties; and the pattern of contention among the parties for future policy-making responsibility” (Duch and Stevenson 2008, 338), among other factors. Those variations are beyond the scope of the rudimentary analysis presented here. Nevertheless, it is clear even from rudimentary analysis that elections in the wake of the Great Recession were significantly influenced by voters’ consistent inclination to reward or punish incumbent governments based on economic growth rates in the months leading up to an election.

Accidents of Timing: Spain and Portugal One important implication of the results presented in Table 2 is that incumbent governments are, to a significant degree, at the mercy of the electoral calendar. A reelection campaign in the midst of an economic boom may provide a convenient opportunity for an incumbent government to renew its popular mandate; conversely, facing the voters in the midst of an economic downturn is likely to be hazardous to an incumbent government’s survival, even if the downturn is global in scope. The political significance of electoral timing may be illustrated by comparing the likely fate of a government presiding over typical (OECD-average) economic conditions in early 2007,

12 before the onset of the Great Recession, with the likely fate of an otherwise similar government presiding over typical economic conditions at the bottom of the recession, in the spring of 2009. Applying the regression parameter estimates in the second column of Table 2 to the average OECD growth rates in the first case suggests that a typical incumbent OECD government facing the voters in early 2007 might have expected its vote share to decline by a modest 2.3 percentage points. In contrast, an incumbent government facing the voters with an OECD-average growth trajectory in the spring of 2009 could expect its vote share to decline by a disastrous 11.2 percentage points. The contrasting electoral fates of the Socialist governments of Spain and Portugal during the period covered by my analysis provide a more concrete illustration of the political ramifications of election timing. The Spanish government led by Socialist Workers’ Party (PSOE) prime minister José Luis Rodriguez Zapatero faced the voters in March 2008, just before slowing economic growth in Spain (and in the OECD as a whole) slid into full-blown recession. The Portuguese Socialist government of José Sócrates was less fortunate; its four-year mandate expired in September 2009, just months after the Great Recession reached its nadir in Portugal (and in the OECD as a whole). The result in Spain was a slight increase in the governing party’s vote share, while the Portuguese Socialists suffered a substantial loss—and the loss of their parliamentary majority. In Spain, the governing PSOE began the three-month campaign period leading up to the March 2008 election with a small—but dwindling—lead in the polls over the conservative People’s Party. According to a report in The Times of London, “The economy expanded rapidly during Mr Zapatero's four-year term in office, extending an uninterrupted, 15-year growth spurt. But dark clouds are forming on the horizon, something the Opposition is doing its best to exploit.

13 Inflation is picking up, hurting household budgets; house prices are also starting to slip after a decade-long boom.”11 The dark clouds on the horizon were not enough to derail the Socialist government in the election. The opposition People’s Party gained 1.1% of the vote, but with an erosion of support for minor parties, the PSOE also gained slightly (0.6%), producing a 4.5% popular vote margin. The PSOE gained five seats in the 350-seat Congress of Deputies, maintaining a narrow plurality that allowed Zapatero to continue as prime minister for up to four more years. Nevertheless, the shadow hanging over the Socialists’ reelection was evident in a morning-after report in The Economist , which noted that Zapatero “must turn his attention to the mounting economic problems facing Spain. … Inflation is running at 4.3%, a housing boom has bust, unemployment is growing and once robust growth is slowing rapidly. … And with global financial turmoil adding to Spain’s woes, the difficult bit is just starting.”12 For the Zapatero government, the “difficult bit” was indeed “just starting.” Spain’s economy was stagnant in the first quarter following the election, then experienced six consecutive quarters of declining real GDP and steadily escalating unemployment.13 Had an election been held in the fall of 2009, when voters in Portugal went to the polls, the statistical analysis reported in the second column of Table 2 suggests that the deterioration in economic conditions since early 2008

11

Thomas Catan, “Spain Gets March Election as Zapatero Struggles to Stay in Office,” The Sunday

Times, January 15, 2008 (http://www.timesonline.co.uk/tol/news/world/europe/article3187271.ece). 12

“Spain’s Election: Back for More,” The Economist, March 10, 2008

(http://www.economist.com/node/10833787). 13

The unemployment rate doubled in the 18 months following the election, from 9.4% to 18.9%, and has

since increased even further, reaching 23% by the time of the November 2011 election.

14 would have cost the PSOE an additional 8.8% of the vote—more than enough to doom the Socialist government. The narrow window of political survival for the Spanish Socialists is evident in opinion surveys conducted by the Centro de Investigaciones Sociológicas (CIS) in Madrid. In July 2008—just four months after the election—CIS’s “vote estimate” showed the PSOE and the People’s Party in a dead heat. By October 2009 the People’s Party held a slim (3.3%) lead. By early 2011 that lead had swelled to ten percentage points.14 With Zapatero’s popularity having “plummeted close to historic lows for a Spanish head of government,” the prime minister first announced that he would step down upon completion of his term, then acceded to mounting pressure to call an early election despite the likelihood that the PSOE would lose its parliamentary majority.15 In the November 2011 election the party’s vote share declined by almost 15 percentage points, resulting in the loss of 59 of its 169 seats in the Congress of Deputies. The People’s Party won an absolute majority of seats. Nevertheless, the Socialist government had had 44 months of its original 48-month term in which to attempt to engineer an economic rebound before facing the verdict of the electorate. The electoral calendar was less kind to the Socialist government of Portugal, which had to face the voters in September 2009, just as the Portuguese economy was emerging from a yearlong recession in which real GDP contracted by 4%. Economic conditions in Portugal were no

14

Centro de Investigaciones Sociológicas, “Indicadores Electorales”

(http://www.cis.es/cis/opencms/EN/11_barometros/Indicadores_PI/electorales.html); “Estimación de Voto” (http://www.cis.es/cis/opencms/-Archivos/Indicadores/documentos_html/sB606050020.html). 15

Raphael Minder, “Spanish Premier Says He Won’t Seek a New Term,” New York Times, April 4, 2011,

page A11. Raphael Minder, “Spanish Premier, Under Pressure, Calls Election for November,” New York Times, July 30, 2011, page A5.

15 worse—indeed, they were somewhat less bad—than elsewhere at this point in the global economic downturn.16 Thus, voters assessing the incumbent government’s performance in comparative context might have been inclined to reward the Socialists for preventing a worse downturn. But that is not what happened. The Socialist Party’s vote share declined by 8.5% from 2005 to 2009, producing a loss of 24 seats—and majority status—in the 230-seat Assembly. Most of the votes lost by the Socialists did not go to the opposition Social Democrats, but to two smaller parties—the Left Bloc and the People’s Party, a conservative Christian democratic party. These results suggest that there was no consistent ideological basis for the turn against the Socialists, but a general disaffection with the party in power when the economy plunged. Only the Socialists’ substantial cushion of electoral support (reflected in a 16% vote margin over the Social Democrats in the 2005 parliamentary election) allowed Sócrates to carry on as prime minister for another 18 months, albeit without a majority in the Assembly. In March 2011, when none of the five opposition parties proved willing to support the austerity program demanded by the European Union in exchange for a bailout—the last in a year-long series of austerity measures in response to Portugal’s burgeoning debt crisis—Sócrates was forced to resign and an early election was scheduled for June 2011. The Socialists’ 8.5% loss in the 2009 Portuguese election nearly matches the expected loss of 10.3% implied by the statistical results presented in the second column of Table 2. However, the same statistical results suggest that if the Socialist government had faced the voters in early

16

Portugal’s real GDP grew by 0.8% in the second quarter of 2009, while the rest of the Euro area was

still contracting. The cumulative decline in real GDP over the two years leading up to the election amounted to 2.3% in Portugal, 3.8% in the Euro area, and 3.5% in the OECD as a whole. Portuguese unemployment stood at 11.1% at the time of the election—slightly higher than the Euro-area average of 10%, but far below the 18.9% level in neighboring Spain.

16 2008, as the Zapatero government did in Spain, it probably would have lost only one or two percentage points, and its absolute majority in the Assembly would have been comfortably preserved for another four years—long enough to adopt prime minister Sócrates’s austerity program and, perhaps, begin to see its effects before the next election. Instead, Portuguese voters went to the polls once again in June 2011 with their economy stagnant, unemployment rising, and a steady diet of painful austerity measures on the horizon. The Socialists garnered only about 28% of the vote—another 8.6% loss on top of the 8.5% loss they had suffered in 2009. Sócrates conceded defeat halfway through the vote-counting, and the Social Democratic leader, Pedro Passos Coelho, prepared to lead a new center-right coalition government including the conservative People’s Party. One voter, a social worker quoted by the New York Times, “said that he continued to feel ‘ideologically on the left,’ but had voted for the first time for the Social Democrats on Sunday. ‘When you have hit the wall like our economy has, you have to accept that it’s time to gamble on a change of direction and give somebody new a chance,’ he said.”17

Ideology: A Turn to the Right? A variety of political observers have seemed to find “something surprising about the failure of center-left parties to benefit from the crisis of financial capitalism” that triggered the Great Recession (Lindvall 2011, 1). For example, The Economist observed that in elections to the European Parliament in June 2009, at the bottom of the economic downturn, parties of the left

17

Raphael Minder, “Social Democrats Claim a Strong Victory in Portugal,” New York Times, June 6,

2011, page A9.

17 had “failed to capitalise on an economic crisis tailor-made for critics of the free market.”18 Two years (and more than a dozen national elections) later, prominent American political consultant Stanley Greenberg wrote that “During this period of economic crisis and uncertainty, voters are generally turning to conservative and right-wing political parties, most notably in Europe and Canada. It’s perplexing. When unemployment is high, and the rich are getting richer, you would think that voters of average means would flock to progressives, who are supposed to have their interests in mind—and who historically have delivered for them.” Instead, he suggested, “many voters in the developed world are turning away from Democrats, Socialists, liberals and progressives.”19 Greenberg’s perplexity is understandable if one supposes that voters are animated by the same ideological understandings that are commonplace among political elites, including most journalists, political scientists, and activists. However, if average voters are mostly inattentive to the manifestos of “critics of the free market” and skeptical of assertions about which parties “historically have delivered for them,” it may not be so surprising to find them behaving in ways that confound conventional ideological expectations. One virtue of systematic comparative electoral analysis is that it can help to suggest alternative explanations for observed election outcomes. Table 3 reports the results of a variety of statistical analyses intended to test whether voters in OECD countries in the midst of the Great Recession displayed any consistent preference for left-wing or right-wing governments. I classify the incumbent government in each country as Left (+1), Center (0), or Right (−1), or (in a few

18

“The European Elections: Swing Low, Swing Right.” The Economist, June 11, 2009 (quoted by

Lindvall 2011). 19

Stanley B. Greenberg, “Why Voters Tune Out Democrats,” New York Times, July 31, 2011, page SR1.

18 cases of coalition governments) Center/Left (+.5) or Center/Right (−.5). This simple classification is not intended to reflect the absolute ideological position of each government, but to characterize its relative position in the political context of its own country.20 [Table 3] The results presented in the first column of Table 3 indicate that, on average, left-wing governments did do less well at the polls than right-wing governments did over the period covered by my analysis.21 However, adding the GDP growth variables from Table 2 to the analysis (in the second column of Table 3) produces a considerably smaller ideological difference, suggesting that much of the apparent effect of ideology in the simpler regression analysis reflected worse economic conditions at election time under left-wing governments than under right-wing governments. Omitting the three most significant outlier elections—Hungary (2010), Ireland (2011), and Slovenia (2011)—from the analysis in the third column further reduces the apparent impact of ideology. Limiting the analysis to the 35 cases in which a single party governed alone or was clearly a senior coalition partner (in the fourth column) leaves the results essentially unchanged. Taken together, these results imply that retrospective voting was a stronger and more consistent factor than ideology in accounting for election outcomes in OECD countries during the five years covered by my analysis.

20

Since my interest is in economic ideology, I classify governing parties based on that dimension. For

example, Poland’s Law and Justice Party and Civic Platform Party are classified as centrist and rightwing, respectively, despite the fact that the former is more conservative on social issues. See Ben Stanley, “Party Placement in Two-Dimensional Issue Space, 2011,” at Polish Party Politics (http://polishpartypolitics.com/2012/03/23/party-placement-in-two-dimensional-issue-space-2011/). 21

The average vote losses for Left and Right incumbents were 6.9% and 0.6%, respectively.

19 The analyses reported in the fifth and sixth columns of Table 3 test two alternative specifications representing slightly more subtle ways in which ideology might influence voters’ responses to the crisis. The interaction between Government Left-Ideology and the timing of each election (measured in years elapsed since the beginning of 2007) allows for the possibility that ideological preferences gradually shifted in favor of left-wing (or right-wing) governments as the economic crisis evolved. For example, Lindvall (2012, 514) argued that “the political consequences of the Great Recession and the Great Depression were remarkably similar: in the first phase of both crises, right-wing parties did significantly better than left-wing parties; after approximately three years, left-wing parties began to recover.” That pattern would be reflected by a larger negative coefficient for Government Left-Ideology in the fifth column of Table 3 (reflecting the “significantly better” performance of right-wing parties early in the crisis), and a positive coefficient for the interaction between Left-Ideology and Year (reflecting the recovery of left-wing parties with the passage of time). In fact, the temporal pattern here turns out to be the opposite of Lindvall’s—left-wing governments did worse in later elections than in earlier ones, holding economic conditions constant—though the statistical results are far too imprecise to be reliable. Finally, the interaction between Government Left-Ideology and GDP growth over the year leading up to the election, in the sixth column of Table 3, allows for the possibility that voters’ sensitivity to economic conditions was greater for left-wing governments than for right-wing governments or vice versa. However, there is no evidence in the data for this possibility either. On the whole, the statistical results reported in Table 3 provide little evidence that voters reacting to the Great Recession made any meaningful ideological distinctions between left-wing and right-wing governments. Of course, that does not imply that voters did not bring ideological

20 values to bear in casting their votes. For one thing, the distribution of durable ideological commitments in each country’s electorate was presumably already reflected in the previous vote share of the incumbent party or parties, which serves as a baseline for my analysis of shifts in vote shares from one election to the next. Moreover, cross-national analysis of the sort presented here can only detect a consistent shift in ideological predilections across the diverse set of countries included in my analysis. If some electorates shifted to the left in response to the crisis while others shifted to the right, there may be no clear ideological pattern in the cross-national data—as there is no clear ideological pattern in the statistical results reported in Table 3. More detailed analysis of specific elections in specific countries might nevertheless provide evidence of consequential ideological shifts.

Germany: Diffusion of Responsibility Germany held a federal election on 27 September 2009—the same day as Portugal. As in Portugal, the timing looked inauspicious for the incumbent government, a “grand coalition” pairing chancellor Angela Merkel’s Christian Democratic Union (and its Bavarian sister party, the Christian Social Union) with its largest competitor, the Social Democratic Party (SPD). Economic conditions in Germany at the time of the election were in some respects even worse than in Portugal; real GDP had declined by a disastrous 5.6% over the previous year, and the OECD consumer confidence index stood at 95.7, well below the European and OECD averages at the time. At first glance, the German election outcome was exactly what might have been expected given these dire economic conditions. The governing parties lost a combined 12.6% of the popular vote, putting the outcome right on the regression lines in Figures 1 and 2. However, the

21 two coalition partners did not share equally in this electoral rout. The SPD’s vote share declined by 11.2% (from 34.2% in 2005 to 23.0%), while the CDU/CSU vote share declined by only 1.4% (from 35.2% to 33.8%). Chancellor Merkel jettisoned her chastened left-wing partner in favor of a new governing coalition with the smaller, center-right Free Democratic Party (FDP)— precisely the result she had angled for during the campaign. This result seems puzzling from either of the perspectives considered here. If Germans were simply engaging in retrospective voting, as the close fit with the overall patterns in Figures 1 and 2 might suggest, why did they choose to punish the SPD but not the CDU/CSU for the country’s economic distress? On the other hand, if they were voting for an ideological shift to the right, spurning the SPD and endorsing the FDP as a new coalition partner, what basis did they have for thinking that the new coalition’s economic policies would be any more successful than the old coalition’s policies had been? The puzzle is reinforced by survey data suggesting that Germans were less in the mood to punish their leaders than might have been expected given the dire economic situation. In a crossnational opinion survey conducted by WorldPublicOpinion.org in May—just four months before the election—only 27% of Germans said that their own country’s economic policies contributed “a lot” to the economic downturn.22 Germans were less likely than citizens in any other country except China and India to say that their own government’s efforts to address the crisis did not go far enough. This relative satisfaction with the government’s handling of the crisis is striking in light of the fact that Germany’s GDP had declined by 6.8% in the year leading up to the survey.

22

“Public Opinion on the Global Economic Crisis,” July 21, 2009

(http://www.worldpublicopinion.org/pipa/pdf/jul09/WPO_FinCrisis_Jul09_quaire.pdf).

22 Responses to some other questions in the same survey shed some additional light on this seemingly anomalous German popular response to the crisis. While only 27% of Germans said that Germany’s economic policies contributed “a lot” to the economic downturn, 68% (more than in any country other than South Korea) said that the economic policies of the United States contributed a lot; 78% blamed their own country’s bankers taking excessive risks; and 88% (more than in any other country in the survey) blamed international bankers taking excessive risks. These results suggest that citizens in Germany, perhaps more than anyplace else in the developed world, interpreted the economic downturn as symptomatic of an external financial shock rather than a domestic political failure. The concrete impact of the crisis on citizens was ameliorated by the existing German welfare state, and also by a variety of extraordinary measures intended “to ease workers’ pain ahead of the election. The government launched a $116 billion stimulus package, subsidized the wages of workers on short hours, boosted welfare payments, and instituted a popular cash-forclunkers program to spur auto production and purchases. Employers privately admit to business publications that they’ve held off on mass layoffs prior to the election.”23 Thus, while the proportion of Germans who said that national economic conditions were “bad” peaked at almost 50% in March 2009, the proportion who said that their own economic circumstances were bad “fluctuated between 10 and 15 percent … through the ups and downs of the greatest economic crisis since the Great Depression” (Anderson and Hecht 2011, 5). For his part, the leader of the SPD, foreign minister Frank-Walter Steinmeier, launched his party’s election campaign by promising new policies to address the crisis, including raising the

23

Folko Mueller and Lee Sustar, “The Left in the German Elections,” SocialistWorker.org, September 25,

2009 (http://socialistworker.org/2009/09/25/left-german-elections).

23 top tax rate, bolstering the minimum wage, and supporting the struggling German carmaker Opel. However, the dissonance between this platform and the policies the SPD had been supporting as part of the grand coalition generated swift simultaneous attacks from the right and from the left. The general secretary of the CDU “dubbed Steinmeier ‘Wobbly Walter’ and said that the SPD ‘shift to the left is now a done deal.’” The SPD’s prospective coalition partner on the left, the Greens, responded equally critically: “What the SPD is proposing today is the opposite of what they did during four years in the grand coalition. So we have to ask them: ‘Are you really serious?’”24 Perhaps as a result, while only 40% of respondents in a pre-election survey trusted Merkel to handle the continuing economic crisis, vastly fewer—a mere 9%— expressed similar confidence in Steinmeier.25 While the “awkward yoking” of “historically bitter rivals” in the grand coalition clearly created a strategic dilemma for the SPD, it also seems to have made for a campaign devoid of drama.26 According to one press report, the CDU and SPD “tended to defend their government’s record rather than challenge one another. A televised debate September 13 found Merkel and Steinmeier agreeing more often than not.”27 “Despite the difficult issues and choices that lie ahead,” another said, “the race has largely steered clear of substantive discussion and debate.”

24

“Steinmeier Determined to Topple Merkel in German Elections,” Deutsche Welle, 19 April, 2009

(http:// www.dw-world.de/dw/article/0,,4190864,00.html). 25

Nicholas Kulish, “Before Election, Not a Voter Was Stirring,” New York Times, August 20, 2009, page

A6. 26

Henry Chu, “German Election a Yawner for Voters,” Los Angeles Times, September 27, 2009

(http://articles.latimes.com/2009/sep/27/world/fg-germany-election27). 27

Folko Mueller and Lee Sustar, “The Left in the German Elections,” SocialistWorker.org, September 25,

2009 (http://socialistworker.org/2009/09/25/left-german-elections).

24 Chancellor Merkel’s high approval ratings “have encouraged her to play it safe and sedate in the campaign” while hoping that the pro-business Free Democratic Party would gain enough support to emerge as a feasible coalition partner.28 The reality of German coalition politics produced yet another barrier to electoral accountability. A voter disinclined to support either of the current governing parties would be forced to choose among a variety of minor parties, the largest of which (FDP, The Left, and the Greens) had received less than 10% of the vote in the last election. But, as Anderson and Hecht (2011, 7) noted, “whichever of the smaller parties such a voter chose would inevitably be forced into a coalition with one of the existing governing parties, given the necessity to achieve a majority in parliament to form a government.” Thus, one or the other of the partners in the grand coalition—Merkel or Steinmeier—would be the next chancellor regardless of what German voters thought of the coalition’s performance over the previous four years. In short, as Anderson and Hecht (2011, 1) put it, “several factors mitigated against strong economic voting effects: voters did not experience much personal economic hardship, the problems produced by the crisis were not homemade, and the alternatives to the incumbent government [were] muddled.” Nevertheless, their detailed analysis of voting behavior based on data from the German Longitudinal Election Study (GLES) found that voters’ assessments of how their own economic circumstances had changed over the past two years did have a significant impact on which party they supported—though not on which of the governing parties they supported. Voters who said they had fared badly during the recession were slightly more likely to choose the SPD over the CDU; but they were much more likely to choose the FDP or

28

Henry Chu, “German Election a Yawner for Voters,” Los Angeles Times, September 27, 2009

(http://articles.latimes.com/2009/sep/27/world/fg-germany-election27).

25 (especially) the Left Party over either of the coalition partners (Anderson and Hecht 2011, 9). As the authors put it (2011, 12), “voters who personally had suffered during the crisis deserted the two governing parties in almost equal measure.” The fact that voters directly affected by the Great Recession seem to have punished both governing parties similarly at the polls—and defected to smaller parties on both the left and the right—suggests that retrospective voting in this instance was, to a good approximation, ideologically neutral. However, the fact remains that the SPD’s vote share fell much more precipitously than the CDU/CSU’s. Anderson and Hecht’s analysis leaves that striking asymmetry unaccounted for. Perhaps it reflected a preference among German voters for the tax cuts and labor market reforms promised by the CDU/CSU (and FDP) over the conventional leftist policies proposed by the SPD? Another analysis of the GLES survey data sheds additional light on the relative electoral fortunes of the two partners in Germany’s grand coalition. Rohrschneider, Schmitt-Beck, and Jung (2010, 23, 22) argued that because the coalition between the two largest parties “precluded a campaign that offered clear choices” on policy grounds, voters were “particularly prone to rely on simple shortcuts such as candidate personality to arrive at decisions”—and that these simple shortcuts strongly favored Merkel over Steinmeier. The authors’ statistical analysis (Rohrschneider, Schmitt-Beck, and Jung 2010, Table 1) provided support for their interpretation. Voters’ choices were most strongly influenced by their preferences for Merkel or Steinmeier as chancellor, and somewhat less affected by evaluations of the CDU/CSU and SPD. Once these personal and party evaluations were taken into account, vote choices were virtually unaffected by ideological self-placements, specific policy positions, or other political values.

26 This analysis suggests that the “muddle” of accountability produced by Germany’s grand coalition resulted in a personal victory for Chancellor Merkel rather than an ideological mandate. In the days after the election, The Economist suggested hopefully that the outcome would allow Merkel to “escape from the cage of the ‘grand coalition’” and pursue “many of the reforms that Germany needs, including to its tax and welfare systems, and to health care and the labour market.”29 However, the New York Times was a good deal more cautious, noting that German voters had “shown little appetite for drastic change in the midst of the economic crisis.”30

The Electoral Impact of Policy Choices The statistical analyses reported in Table 3 provide little evidence of any consistent ideological impulse in election outcomes in the wake of the Great Recession. However, the broad ideological classification of incumbent governments employed in those analyses may not be indicative of the specific policies governments adopted in response to the economic crisis. If leftof-center governments generally did not pursue conventional left-of-center policies, such as Keynesian fiscal stimulus measures and deficit spending—or if centrist and right-of-center governments also pursued those policies, as seems to have been the case in Germany—then voters might have little reason to be swayed one way or the other by conventional ideological labels. The statistical analyses reported in Table 4 explore the relationship between broad ideologies and specific policy choices in response to the Great Recession. As it turns out, that

29

“Merkel’s Moment,” The Economist, October 1, 2009 (http://www.economist.com/node/14548863).

30

Nicholas Kulish, “Merkel’s Party Claims Victory in Germany,” New York Times, September 27, 2009

(http://www.nytimes.com/2009/09/28/world/europe/28germany.html).

27 relationship is very modest, revealing almost no connection between ideologies and policies. Indeed, the statistical analyses suggest that major policy choices in the wake of the economic crisis were mostly unrelated to a variety of fundamental political and economic indicators, including the ideology of the governing party or coalition, wealth, prior indebtedness, and the severity of the recession in each country. [Table 4] The regression analysis reported in the first column of Table 4 focuses on government debt.31 The cumulative growth in central government debt from 2007 to 2010 exceeded 40% of GDP in Iceland (58.1%), Britain, Greece and Ireland. The United States, Japan, Spain and Portugal saw increases in debt ranging from 20% to 26% of GDP. The level of debt increased by 5% to15% of GDP in most other OECD countries, with the exception of Sweden and Israel, which slightly reduced their outstanding debt. The parameter estimates in Table 4 indicate that left-wing governments accumulated only slightly more debt over the course of the economic crisis than right-wing governments did—an additional 1% of GDP, other things being equal.32 Nor is there any evidence that incremental debt was driven by the depth of the recession in a given country (the estimated effect of 2008 GDP growth is actually positive, though quite imprecise) or its level of economic development

31

“Central Government Debt: Total central government debt (% GDP),” OECD (http://stats.oecd.org). I

have tabulated the growth in outstanding debt from 2007 to 2010 (extrapolating Japan in 2010). 32

Allowing for a statistical interaction between ideology and the severity of the recession suggests that

left-wing governments may have been more sensitive to economic conditions in accumulating debt than right-wing governments were; but this difference is far from being statistically “significant,” and mostly reflects the anomalous case of Greece, where a substantial debt crisis coincided with a relatively modest decline in GDP in 2008.

28 (as measured by GDP per capita in 2007). Finally, the expectation that debt accumulation might be constrained by existing indebtedness is confounded by a modest (and also quite imprecise) positive coefficient on prior debt (as measured by total debt in 2007 relative to GDP). The regression analyses reported in the remaining columns of Table 4 focus on three more specific aspects of governments’ fiscal policies at the height of the crisis, in 2009: (1) cyclical deficits resulting from declines in tax revenues and increased spending on “automatic stabilizers” such as unemployment insurance; (2) discretionary stimulus spending; and (3) other discretionary spending such as bailouts and nationalizations.33 Here, too, there is surprisingly little evidence of systematic connections between ideologies and economic conditions on one hand and policy choices in response to the Great Recession on the other. Cyclical deficits were substantial in every OECD country, ranging from 3% of GDP in the United States to 8.7% in Sweden. Some of this variation no doubt reflects differences in the structure of welfare states resulting from durable ideological differences among countries (as the examples of the U.S. and Sweden suggest). However, the ideological complexion of the incumbent government in each country seems to have had little or no bearing on the magnitude of the cyclical deficit it incurred in 2009. Rather, the statistical results presented in the second column of Table 4 suggest that the magnitude of each country’s cyclical deficit mostly reflected the severity of its recession—as we would expect if this spending was an automatic response to the downturn rather than a fiscal policy choice. There is also some evidence that preexisting debt moderated cyclical responses to the recession, with an 18% increase in 2007 indebtedness (roughly, the difference between a typical country like Germany or Britain and a low-debt country like Canada or New Zealand) counterbalancing an additional 1% decline in GDP. 33

Projected spending data from OECD June 2009 Economic Outlook tabulated by Ansell (2010, Table 2).

29 Discretionary stimulus programs were smaller in magnitude, ranging from less than 1% of GDP in Italy, Switzerland, France, and Portugal to 4.5% in Japan—though in Hungary, Iceland, and Ireland, draconian austerity programs produced substantial declines in discretionary spending (ranging from 6.5% to 7.7% of GDP) in 2009. Again, the results in Table 4 reveal no consistent relationship between the ideological complexion of each country’s government and its fiscal policy—if anything, left-wing governments may have spent slightly less on stimulus programs than right-wing governments did, other things being equal. However, once cases of significant fiscal contraction are set aside, there is some indication that ideology influenced the relationship between GDP growth and discretionary stimulus spending, with left-wing governments spending more in countries with mild recessions and right-wing governments spending more in countries with more severe downturns.34 Other discretionary spending also varied substantially across OECD countries, with major bailouts in all of the English-speaking democracies (ranging from 4.5% of GDP in the United States to 8.8% in the United Kingdom). Here, too, the statistical analysis (summarized in the fourth column of Table 4) suggests that the cross-national differences are not easily explained by differences in ideology or economic circumstances. Richer countries and those with left-wing

34

Altering the regression model in the third column of Table 4 to include an interaction between ideology

and GDP change produces a coefficient of 1.16 (with a standard error of 1.78) for the main effect of ideology and a coefficient of .42 (with a standard error of .35) for the interaction term. Excluding the three cases with substantial fiscal contractions—Hungary, Iceland, and Ireland—the corresponding parameter estimates are .60 (with a standard error of .42) and .30 (with a standard error of .09). The latter estimates suggest that a mild recession like Norway’s (GDP growth of −1.1%) would produce an expected discretionary stimulus amounting to 2.3% of GDP under a left-wing government and 1.8% under a right-wing government, while a more severe downturn like Germany’s (−6.8%) would produce an expected stimulus of only 0.8% under a left-wing government but 3.7% under a right-wing government.

30 governments may have been slightly more prone to bailouts, other things being equal, but the differences are fairly small and statistically unreliable. Did voters reward or punish their political leaders for engaging in Keynesian fiscal policies in response to the Great Recession? The regression analyses reported in Table 5 explore the electoral impact of the policy choices of incumbent governments. Since the OECD spending data employed here are projections for 2009, the analyses are limited to elections from 2009 through 2011. [Table 5] The regression analyses reported in the first three columns of Table 5 focus on the electoral impact of government debt. The simple bivariate regression of incumbent electoral performance on incremental debt, presented in the first column of the table, suggests that each additional percentage point of debt accumulated by a government over the three years of the crisis (2008, 2009, and 2010) reduced the incumbent government’s vote share by a quarter of a percentage point. This is a fairly strong relationship, suggesting, for example, that the ballooning debts of Greece, Ireland, and the United Kingdom depressed electoral support for their incumbent governments by as much as 10 percentage points. However, part of that relationship is spurious, reflecting the fact that governments in worse economic circumstances were more likely to resort to substantial increases in debt. When real GDP growth rates in the year leading up to each election are added to the analysis (in the second column of Table 5) the apparent effect of incremental government debt is cut almost in half. This estimate implies that the debt increases in Greece, Ireland, and the United Kingdom probably cost their incumbent governments five or six percentage points at the polls, while a typical accumulation of debt—about 12% of GDP—

31 would have cost an incumbent government only one or two percentage points.35 Excluding the three countries that pursued stringent austerity programs—Hungary, Iceland, and Ireland—from the analysis (reported in the third column of Table 5) reduces the apparent electoral impact of debt still further. The regression analyses reported in the last three columns of Table 5 focus on the electoral impact of specific aspects of governments’ fiscal policies at the height of the recession, in 2009. The analysis in the fourth column relates each incumbent party’s vote share (in the 17 countries with elections after 2008 for which the relevant data are available) to the magnitude of the cyclical deficit, discretionary stimulus spending, and bailouts and nationalizations. This analysis suggests that, even after allowing for the electoral impact of overall GDP growth, discretionary stimulus spending had a significant electoral payoff—while cyclical deficit spending and bailouts and nationalizations, if they had any effect at all, were probably harmful to incumbents’ electoral prospects. The parameter estimate for discretionary spending suggests that robust stimulus programs in Japan, Sweden, Australia, Denmark, Germany, Finland, and New Zealand (ranging from 3.0% to 4.5% of GDP) probably netted incumbent governments an extra four to six percentage points at the polls, whereas severe retrenchments in Iceland, Hungary, and Ireland (ranging from 6.5% to 7.7% of GDP) cost the incumbent governments in those countries nine or ten percentage points when they stood for reelection. Analyses excluding the three countries with stringent austerity

35

Separate analyses for left-wing and right-wing governments suggest that the latter may have been more

severely punished by voters for accumulating debt; but .8% under a right-wing government, while a more severe downturn like Germany’s (−6.8%) would produce an expected stimulus of only 0.8% under a leftwing government but 3.7% under a right-wing government.

32 programs—in the fifth and sixth columns of Table 5—suggest an even larger electoral impact of stimulus spending, though the parameter estimates are much less precise. The apparent impact of discretionary stimulus spending provides the strongest evidence I have found of a significant electoral response to governments’ fiscal policy choices during the Great Recession. However, even this evidence is unavoidably fragile, given the limitations of the data on which it is based. The basic relationship between incumbents’ vote shares and discretionary stimulus spending is displayed in Figure 3. While the relationship is clearly positive (and the slope of the bivariate regression closely matches the corresponding parameter estimate in the fourth column of Table 5), the disparity in policies between the 14 countries with modest stimulus programs and the three with severe austerity programs provides rather little statistical leverage for assessing the electoral effects of less drastic policy differences. However, excluding the three austerity cases leaves the bivariate relationship between stimulus spending and election outcomes (represented by the dotted line in Figure 3) virtually unchanged. Thus, it seems likely—though by no means certain—that voters did punish incumbent governments for austerity and rewarded them for stimulating their economies in a period of crisis. [Figure 3]

The United States: A Rejection, But of What? Barack Obama’s historic victory in the 2008 U.S. presidential election was portrayed by enthusiastic pundits as a “rebirth of American liberalism,” “the culmination of a Democratic realignment that began in the 1990s,” and the advent of a “transformative” progressive presidency. The atmosphere of crisis in which Obama took office reinforced expectations of swift action on an ambitious and, presumably, popular progressive legislative agenda. One

33 prominent political observer argued not only that “liberal views have re-emerged … with a vengeance,” but also that those views “can be expected to shift further leftward—especially on economic questions—in the face of coming recession.” Comparisons with Franklin Roosevelt and the famous first 100 days of the New Deal era abounded.36 However, as with many new political orders proclaimed by pundits, America’s “New Liberal Order” (as Time magazine dubbed it) proved to be remarkably short-lived. A slow rebound of economic growth, high unemployment, and partisan rancor drove Obama’s popularity steadily lower through most of his first two years in office. When his Democratic allies in Congress faced the voters in November 2010 they suffered a substantial defeat, losing 8.4% of the popular vote and 63 seats in the 435-seat House of Representatives—an even worse showing than might have been expected given the state of the U.S. economy at the time. With the Republican opposition back in control of the House, Americans faced a return to “divided government” and legislative gridlock. Unlike the 2009 federal election in Germany, the 2010 midterm election in the U.S. was widely interpreted as an adverse judgment by voters on the policies of the incumbent government. In the New York Daily News, for example, the election result was presented as “a stinging rebuke to President Obama.”37 In his election night victory speech, new Speaker of the House John Boehner argued that the American people had sent an “unmistakable message” to the

36

Peter Beinart, “The New Liberal Order,” Time, November 13, 2008. John B. Judis, “America the

Liberal,” The New Republic, November 19, 2008. Robert Kuttner, Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency (Chelsea Green, 2008), 1. Quotations are from Beinart, Judis, Kuttner, and Judis, respectively. 37

Thomas M. DeFrank, “Midterm Election Results Show Voters Unhappy with President Obama’s

Leadership,” New York Daily News, November 3, 2010.

34 president, “and that message is: ‘change course.’ We hope President Obama will now respect the will of the people, change course, and commit to making the changes they are demanding.” According to Boehner, voters had rejected “the spending sprees, the bailouts, the backroom deals, the takeovers and all the nonsense” in favor of cutting spending, reducing the size of government, and “helping small businesses get people back to work.”38 In his own post-election press conference, Obama resisted the notion that voters had rejected his policies, preferring to interpret the outcome as merely a reflection of economic frustration. Voters, the president said, are not satisfied with the outcomes. If right now we had 5 percent unemployment instead of 9.6 percent unemployment, then people would have more confidence in those policy choices. The fact is, is that for most folks, proof of whether they work or not is has the economy gotten back to where it needs to be. And it hasn’t. … And ultimately, I’ll be judged as President as to the bottom line, results.39 In a television interview the next day, Obama was pressed once again regarding the meaning of the election. He replied by ticking off a variety of popular policy initiatives, then added a grudging concession that voters may have misinterpreted his administration’s responses to the economic crisis as reflecting an ideological agenda. “I think that what happened over the course of two years,” he said, was that we had to take a series of big, emergency steps quickly. And most of them in the first six months of my administration. Each of them had a big price tag. You got 38

“Midterms 2010: John Boehner’s Victory Speech in Full.” The Telegraph, November 3, 2010

(http://www.telegraph.co.uk/news/worldnews/us-politics/8106711/Midterms-2010-John-Boehnersvictory-speech-in-full.html). 39

“Press Conference by the President, November 03, 2010” (http://www.whitehouse.gov/the-press-

office/2010/11/03/press-conference-president).

35 intervention in the banks. You’ve got the auto bailout. You’ve got a stimulus package. Each one with a lot of zeroes behind it. And people looked at that and they said, ‘Boy, this feels as if there’s a huge expansion of government.’40 A national survey of voters leaving their polling places seemed to bolster the notion that the election outcome was shaped not only by adverse economic conditions, but also by adverse assessments of the policies and priorities of the Obama administration. For example, 56% of the exit poll respondents said that the government was “doing too much,” and they supported Republican candidates by a margin of almost four to one; on the other hand, 38% said that the government “should do more,” and they supported Democratic candidates by about the same margin. Similarly, 58% said that the “highest priority” for the next Congress should be reducing the deficit (40%) or cutting taxes (18%); they voted Republican by a 67-30 margin, while the 37% who said the highest priority should be “spending to create jobs” supported Democratic candidates by a 68-30 margin.41 Results like these suggested that voters on both sides were animated by policy concerns related to the government’s response to the economic crisis—and that many more of them were animated to oppose the policies of the president and the Democratic majority in Congress than to support those policies. However, a different—and perhaps more reliable—way to assess the political significance of specific policy choices in the American setting is to estimate the direct electoral impact of major roll call votes on the electoral fortunes of individual members of 40

“Transcript: President Barack Obama, Part 1. ‘60 Minutes’ Correspondent Steve Kroft Interviewed The

President Nov. 4, 2010” (http://www.cbsnews.com/stories/2010/11/07/60minutes/main7032276.shtml?tag=contentMain;contentBo dy). 41

“U.S. House: National Exit Poll, 17,504 Respondents”

(http://www.cnn.com/ELECTION/2010/results/polls/#val=USH00p1).

36 Congress (Jacobson 1996). In this spirit, McGhee (2010) estimated the electoral cost to Democratic incumbents of supporting each of four controversial bills: the 2008 Troubled Assets Relief Program (TARP); the $787 billion stimulus package passed a few weeks after President Obama took office; a cap-and-trade energy bill which later died in the Senate; and the Affordable Care Act, which substantially reformed the American health care system. His estimates suggest that the cost of supporting TARP was “small and insignificant,” while the cost of supporting the stimulus package was 2.8%, cap-and-trade 2.1%, and health care reform 4.5%. The cap-andtrade and health care votes seem to have been more ideologically charged, with Democratic supporters punished much more in more Republican districts, while support for the stimulus “seems to [have] hurt everyone.” A simulation based on these estimates suggested that, if every vulnerable Democrat had refrained from supporting the cap-and-trade and health care bills, the party would have lost 24 fewer seats, bringing the election outcome into close agreement with forecasts based primarily on the state of the economy.42 McGhee’s estimates of the effects of Democratic support for cap-and-trade (2.1%) and health care reform (4.5%) are just large enough (bearing in mind that only about half the districts in the country had Democratic incumbents who supported those bills running for reelection) to account for the discrepancy between the Democrats’ aggregate vote loss (8.4%) and their expected vote loss based on the statistical relationship in Figure 3 (5.2%). While the exactness of this correspondence is no doubt coincidental, it does suggest that the Democrats’ apparent under-

42

A similar analysis by Brady, Fiorina and Wilkins (2011) only focused on the cap-and-trade and health

care votes; their results implied that by opposing these bills Democrats could have saved somewhere between 22 and 40 seats, “strongly suggesting that the votes in question cost the Democrats their majority” (Brady, Fiorina and Wilkins (2011, 249).

37 performance in the 2010 election may have been attributable to policy choices largely unrelated to the economic crisis. While individual Democrats in Congress seem to have been punished for supporting health care reform and cap-and-trade legislation, their support for legislative initiatives more directly related to the economic crisis probably bolstered their electoral support. Even if we accept McGhee’s estimate that supporting the Obama stimulus package cost Democratic incumbents 2.8% of the vote, this electoral penalty was almost certainly more than offset by the political benefit of improved economic conditions resulting from the implementation of the stimulus program. Economists Alan Blinder and Mark Zandi (2010, Table 9) estimated that the stimulus package added 1.3% to real GDP in 2009 and 1.9% in 2010.43 Combining those estimates with my own estimates of electoral responses suggests that the economic benefit of the stimulus package probably reduced the Democrats’ national vote loss by somewhere between 2.7% and 4.9%—enough to offset the direct electoral cost to specific Democratic incumbents who voted for the stimulus bill, while leaving the party as a whole distinctly better off.44 Thus, while many observers seemed to believe that the 2010 election constituted a rejection by American voters of the president’s response to the economic crisis, the truth of the matter is

43

More broadly, Blinder and Zandi (2010, Table 4) estimated that the entire portfolio of policy responses

to the Great Recession by the Federal Reserve, Congress, and the Bush and Obama administrations boosted real GDP by 4.9% in 2009 and 6.6% in 2010. 44

Based on the parameter estimates reported in the second column of Table 2, the combined effect of an

additional 1.9% real GDP growth in 2010 and an additional 1.3% growth in 2009 would be to increase the Democratic vote share in the 2010 election by 2.7%. The analysis presented in the fourth column of Table 5 implies that the direct effect of a stimulus amounting to $309 billion (approximately 2.2% of GDP) in 2009 would be to increase the Democratic vote share by about 3%, while the additional impact of greater overall GDP growth would increase the Democratic vote share by an additional 1.9%.

38 that that response almost certainly staved off an even worse electoral debacle—because it staved off an even worse economic debacle. If Obama and his party overreached, it was in other areas— most notably, by forcing through Congress an historic overhaul of health care reform and by trying but failing to pass a major energy bill. By rebuking Democrats for what may have felt like “a huge expansion of government” in these areas, voters also seemed to be rejecting the huge expansion of government that forestalled a much longer and deeper Great Recession. The ironic result, as one observer noted, was that “the electorate has now restored to power in the House the same crowd they repudiated only two years ago—and whose policies, by any honest reckoning, wrecked the economy.”45

Conclusion Interpreting election outcomes is not merely a scholarly pursuit. Specific understandings of what voters had in mind, individually and collectively, in casting their ballots can shape practical political thought, discourse, and action for better or worse (Grossback, Peterson, and Stimson 2006). American political culture in the 20th century was significantly shaped by the conventional belief that the 1936 election constituted a referendum on the New Deal and, more broadly, on the role of the federal government in the American economy and society. More recently, the notion that the outcome of the 2010 midterm election represented “a stinging rebuke to President Obama” and that the American people had sent an “unmistakable message” to “change course” has seemed to alter the political standing and strategies of both the president and his Republican opponents.

45

Thomas M. DeFrank, “Midterm Election Results Show Voters Unhappy with President Obama’s

Leadership.”

39 When understandings of this sort are mistaken, political trouble may ensue. For example, British Conservative Party leader David Cameron interpreted his party’s 2010 election victory as a mandate for “new economic management” and “the most radical decentralization of power this country has seen for generations.”46 However, polls at the time found solid majorities of Britons in favor of aiding troubled major industries and companies, significantly increasing government spending, and even providing financial support to troubled banks.47 And a detailed study of British public opinion found that “public satisfaction with health and education improved dramatically” under the Labour government, “leaving the researchers asking why Labour did not fight the election on its social policy record—and warning that the [Conservative-led] coalition is now risking a significant backlash against its reforms and cuts to public services that people are happy with.”48 Placing the outcome of any particular election in a broader comparative perspective may help to restrain the tendency of election observers—and especially of election winners—to overinterpret the ideological significance of the result. Americans in the Great Depression repudiated Herbert Hoover and then reelected Franklin Roosevelt in a landslide; but voters in other

46

David Batty, “David Cameron Launches Election Campaign with Economy Pledge,” The Guardian, 2

January 2010 (http://www.guardian.co.uk/politics/2010/jan/02/david-cameron-election-campaigneconomy). 47

Britons favored “financial support to troubled major industries and companies” by a margin of 73% to

23%, “significantly increasing government spending” by a margin of 60% to 35%, and “financial support to troubled banks” by a margin of 55% to 42%. “Global Poll Shows Support for Increased Government Spending and Regulation,” September 13, 2009 (http://www.worldpublicopinion.org/pipa/pdf/sep09/BBCEcon_Sep09_rpt_final.pdf). 48

Polly Curtis, “Britain ‘More Thatcherite Now than in the 80s’ Says Survey,” The Guardian, 13

December 2010 (http://www.guardian.co.uk/education/2010/dec/13/social-survey-thatcherite-britain).

40 democracies in the same period repudiated left-wing governments when times were bad and reelected right-wing governments when economic conditions improved. By the same token, John Boehner and David Cameron led conservative opposition parties to significant victories at the polls in the wake of the Great Recession, but they—and we—might do well to bear in mind that at the same time, conservative governments in countries as diverse as Iceland and Japan were even more decisively repudiated after presiding over significant economic downturns.49 In periods of economic crisis, as in more normal times, voters have a strong tendency to support any policies that seem to work, and to punish leaders regardless of their ideology when economic growth is slow.

49

Iceland and Japan experienced declines in real GDP of 6.1% and 7.0%, respectively, in the run-ups to

their 2009 elections; their right-of-center governments suffered vote losses of 12.9% and 9.1%.

41 References Achen, Christopher H., and Larry M. Bartels. 2004. “Musical Chairs: Pocketbook Voting and the Limits of Democratic Accountability.” Annual Meeting of the American Political Science Association, Chicago (http://www.princeton.edu/~bartels/chairs.pdf). Achen, Christopher H., and Larry M. Bartels. 2005. “Partisan Hearts and Gall Bladders: Retrospection and Realignment in the Wake of the Great Depression.” Annual Meeting of the Midwest Political Science Association, Chicago (http://www.princeton.edu/~bartels/depress3.pdf). Achen, Christopher H., and Larry M. Bartels. 2009. “Blind Retrospection: Electoral Responses to Droughts, Floods, and Shark Attacks.” Department of Political Science, University of North Carolina at Chapel Hill (http://www.unc.edu/polisci/aprg/pdfs/Achen%20APRG%20Talk.pdf). Anderson, Christopher J. 1995. Blaming the Government: Citizens and the Economy in Five European Democracies. Armonk, NY: M. E. Sharpe. Anderson, Christopher J., and Jason D. Hecht. 2011. “Voting When the Economy Goes Bad, Everyone is in Charge, and No One is to Blame: The Case of the 2009 German Election.” Electoral Studies, forthcoming. Ansell, Ben W. 2010. “Crisis as Political Opportunity? Partisan Politics, Housing Cycles, and the Credit Crisis.” Conference on Government Responses to the Economic Crisis, Russell Sage Foundation, New York (http://www.princeton.edu/~piirs/projects/Ben%20Ansell%20Crisis%20as%20Political%20 Opportunity%20Russell%20Sage.pdf). Bartels, Larry M. 2008. Unequal Democracy: The Political Economy of the New Gilded Age. New York and Princeton, NJ: Russell Sage Foundation and Princeton University Press. Blinder, Alan S., and Mark Zandi. 2010. “How the Great Recession Was Brought to an End.” Princeton University and Moody’s Analytics (http://www.economy.com/markzandi/documents/End-of-Great-Recession.pdf).

42 Brady, David W., Morris P. Fiorina, and Arjun S. Wilkins. 2011. “The 2010 Elections: Why Did Political Science Forecasts Go Awry?” PS, April, 247-250. Converse, Philip E. 1964. “The Nature of Belief Systems in Mass Publics.” In David E. Apter, ed., Ideology and Discontent. New York: Free Press. Downs, Anthony. 1957. An Economic Theory of Democracy. New York: Harper and Brothers. Duch, Raymond M., and Randolph T. Stevenson. 2008. The Economic Vote: How Political and Economic Institutions Condition Election Results. New York: Cambridge University Press. Enelow, James M., and Melvin J. Hinich. The Spatial Theory of Voting: An Introduction. Cambridge: Cambridge University Press. Fiorina, Morris P. 1981. Retrospective Voting in American National Elections. New Haven, CT: Yale University Press. Grossback, Lawrence J., David A. M. Peterson, and James A. Stimson. 2006. Mandate Politics. Cambridge: Cambridge University Press. Healy, Andrew J., Neil Malhotra, and Cecilia Hyunjung Mo. 2010. “Irrelevant Events Affect Voters’ Evaluation of Government Performance.” Proceedings of the National Academy of Sciences 107:29, 12804-12809. Hibbs, Douglas A., Jr. 2006. “Voting and the Macroeconomy.” In Barry R. Weingast and Donald A. Wittman, eds., The Oxford Handbook of Political Economy, 565-586. Oxford: Oxford University Press. Kayser, Mark Andreas, and Michael Peress. 2011. “Benchmarking across Borders: Electoral Accountability and the Necessity of Comparison.” Presented at the annual meeting of the European Political Science Association, Dublin. Jacobson, Gary C. 1996. “The 1994 House Elections in Perspective.” Political Science Quarterly 111:2, 203-223. Key, V. O., Jr. 1966. The Responsible Electorate: Rationality in Presidential Voting, 1936-1960. Cambridge, MA: Harvard University Press.

43 Kramer, Gerald H. 1971. “Short-Term Fluctuations in U.S. Voting Behavior, 1896-1964.” American Political Science Review 71:1, 131-143. Lewis-Beck, Michael S. 1988. Economics and Elections: The Major Western Democracies. Ann Arbor: University of Michigan Press. Lindvall, Johannes. 2012. “The Political Consequences of The Great Depression and the Great Recession: Remarkably Similar.” Swiss Political Science Review 18:4, 514-517. Mayhew, David R. 2002. Electoral Realignments: A Critique of an American Genre. New Haven, CT: Yale University Press. McGhee, Eric. 2010. “Which Roll Call Votes Hurt the Democrats?” The Monkey Cage, November 9 (http://themonkeycage.org/blog/2010/11/09/which_roll_call_votes_hurt_the/). Murillo, Maria Victoria, Virginia Oliveros, and Milan Vaishnav. 2010. “Electoral Revolution or Democratic Alternation?” Latin American Research Review 45, 87-114). Rohrschneider, Robert, Rüdiger Schmitt-Beck, and Franziska Jung. 2010. “Short-Term Factors versus Long-Term Values: Testing Competing Explanations of Electoral Choice.” German 2009 Election Conference, Lawrence, Kansas (http://www.dgfw.eu/dok/papers/rohr_schm_jung.pdf). Rosenstone, Steven J. 1983. Forecasting Presidential Elections. New Haven, CT: Yale University Press. Stokes, Donald E. 1963. “Spatial Models of Party Competition.” American Political Science Review 57:2, 368-377. Tufte, Edward R. 1978. Political Control of the Economy. Princeton, NJ: Princeton University Press.

44 Table 1: Elections in OECD Countries, 2007-2011

Country

Election Date

Incumbent Party

Incumbent Ideology

GDP Vote Growth Gain/Loss

Estonia

4 March ’07

Reform/Centre

Center/Right

9.1

+10.81

Finland

18 March ’07

Centre/Social Dem

Center/Left

5.0

−4.61

Iceland

12 May ’07

Independence (SSF)

Right

3.2

+2.96

Ireland

24 May ’07

Fianna Fáil

Center

6.7

+0.08

France

17 June ’07

UMP

Right

2.6

+0.91

Turkey

22 July ’07

Justice and Devlp

Right

3.6

+12.38

Greece

16 Sept ’07

New Democracy

Right

4.2

−3.52

Poland

21 Oct ’07

Law and Justice

Center

6.3

+5.12

Denmark

13 Nov ’07

Liberal (Venstre)

Right

1.5

−2.77

Spain

9 March ’08

Socialist (PSOE)

Left

3.1

+0.60

Italy

14 April ’08

Democratic (PD)

Left

0.4

+1.90

Slovenia

21 Sept ’08

Slov Dem (SDS)

Right

4.9

+0.18

Austria

28 Sept ’08

Soc Dem/People’s

Center

2.1

−14.43

Canada

14 Oct ’08

Conservative

Right

0.7

+1.38

United States

4 Nov ’08

Republican

Right

−0.6

−1.68

New Zealand

8 Nov ’08

Labour

Left

−0.6

−7.11

Israel

10 Feb ’09

Kadima/Labor

Center/Left

2.0

−4.68

Iceland

25 April ’09

Independence (SSF)

Right

−5.4

−12.94

Japan

30 Aug ’09

Liberal Dem

Right

−6.5

−9.09

Norway

14 Sept ’09

Labour (DNA)

Left

−2.3

+2.68

Germany

27 Sept ’09

CDU/SPD

Center

−6.2

−12.59

Portugal

27 Sept ’09

Socialist (PS)

Left

−3.5

−8.47

Greece

4 Oct ’09

New Democracy

Right

−3.5

−8.36

Chile

13 Dec ’09

Concert (CPD)

Left

−0.8

−7.41

Hungary

25 April ’10

Socialist (MSZP)

Left

−0.3

−23.91

United Kingdom

6 May ’10

Labour

Left

1.2

−6.19

Netherlands

9 June ’10

Chr Dem/Labour

Center

0.3

−14.46

45 Slovak Republic

12 June ’10

Direction−Soc Dem

Left

4.9

+5.66

Australia

21 Aug ’10

Labor

Left

3.0

−2.58

Sweden

19 Sept ’10

Moderate

Right

5.3

+3.83

United States

2 Nov ’10

Democratic

Left

3.5

−8.16

Ireland

25 Feb ’11

Fianna Fáil

Center

0.1

−24.11

Estonia

6 March ’11

Reform

Right

6.0

+0.74

Finland

17 April ’11

Centre/Nat Cltn

Center

5.3

−9.23

Canada

2 May ’11

Conservative

Right

2.9

+1.97

Portugal

5 June ’11

Socialist (PS)

Left

−0.6

−8.51

Turkey

12 June ’11

Justice and Dvlpt

Right

10.9

+3.25

Denmark

15 Sept ’11

Liberal (Venstre)

Right

1.3

+0.47

Poland

9 Oct ’11

Civic Platform

Right

4.0

−2.33

Spain

20 Nov ’11

Socialist (PSOE)

Left

0.8

−14.71

New Zealand

26 Nov ’11

National

Right

1.4

+2.38

Slovenia

4 Dec ’11

Social Democrats

Left

−0.2

−20.42

46 Table 2: Economic Conditions and Changes in Incumbent Vote Shares, 2007-2011 Ordinary least squares regression parameter estimates (with standard errors in parentheses) 1

2

3

ΔGDP(1-4Q)

1.20

1.02

(.30)

(.29)

---

ΔGDP(5-8Q)

---

Relative ΔGDP(1-4Q)

---

---

Relative ΔGDP(5-8Q)

---

---

Unemployment

---

Intercept

.56 (.24)

---

4

5

6

.75

1.05

.95

(.37)

(.29)

(.24)

.42

.42

.26

(.36)

(.25)

(.21)

---

---

---

-----

1.61

.75

(.53)

(.65)

.38

−.02

(.42)

(.54)

---

---

---

−.44

−6.33

−7.10

−5.75

−6.92

−3.31

−5.20

(1.22)

(1.20)

(1.15)

(1.24)

(2.89)

(1.06)

Adjusted R2

.27

.35

.29

.34

.36

.33

Std error of reg

7.12

6.75

7.05

6.80

6.66

5.51

N

42

42

42

42

42

39a

a

(.30)

Excluding countries where incumbents lost more than 20 percentage points (Hungary 2010, Ireland 2011, Slovenia 2011).

47 Table 3: Ideology and Changes in Incumbent Vote Shares, 2007-2011 Ordinary least squares regression parameter estimates (with standard errors in parentheses) 1

2

3

4

−3.42

−2.05

−1.45

(1.38)

(1.22)

(1.03)

Left-Ideology × Year

---

---

---

---

Left-Ideology × ΔGDP(1-4Q)

---

---

---

---

ΔGDP(1-4Q)

---

.97

.92

1.01

.95

1.00

(.29)

(.24)

(.33)

(.29)

(.33)

ΔGDP(5-8Q)

---

Intercept

Government Left-Ideology

5

6

−1.89

−.18

−2.12

(1.27)

(2.61)

(1.30)

−.65 (.81)

---

--.07 (.40)

.45

.19

.41

.48

.46

(.24)

(.21)

(.26)

(.24)

(.24)

−4.45

−6.98

−5.18

−6.20

−6.86

−7.00

(1.22)

(1.18)

(1.05)

(1.29)

(1.19)

(1.20)

Adjusted R2

.11

.38

.35

.34

.37

.36

Std error of reg

7.87

6.59

5.44

6.69

6.62

6.68

42

42

N a

42

42

39

a

35

b

Excluding countries where incumbents lost more than 20 percentage points (Hungary 2010, Ireland 2011, Slovenia 2011). b Excluding coalition governments (Estonia 2007, Finland 2007, Austria 2008, Israel 2009, Germany 2009, Netherlands 2010, Finland 2011).

48 Table 4: Ideology, Economic Conditions, and Policy Responses to the Crisis Ordinary least squares regression parameter estimates (with standard errors in parentheses)

Government Left-Ideology

Incremental debt (2008-10)

Cyclical deficit (2009)

Discretionary stimulus (2009)

Bailouts and nationalizations (2009)

.51

−.20

−.58

1.21

(3.39)

(.28)

(.96)

(1.01)

ΔGDP

.58

−.51

.49

.38

(2008:I-2009:I)

(.86)

(.11)

(.39)

(.40)

GDP/capita

−.000

−.077

.156

.142

(US $1000s, 2007)

(.001)

(.037)

(.126)

(.132)

Total Debt

.097

−.028

.042

.003

(% GDP, 2007)

(.087)

(.009)

(.032)

(.033)

15.42

6.95

−4.18

−.50

(6.06)

(1.35)

(4.60)

(4.82)

Adjusted R2

−.10

.46

−.06

−.02

Std error of reg

15.04

1.09

3.72

3.89

N

27a

20b

20b

20b

Intercept

a b

Including only countries with OECD debt data. Including only countries with OECD spending data.

49 Table 5: Policies and Changes in Incumbent Vote Shares, 2009-2011 Ordinary least squares regression parameter estimates (with standard errors in parentheses)

Incremental government debt (% GDP, 2008-10)

Cyclical deficit (% GDP, 2009)

Discretionary stimulus

1

2

3

4

5

6

−.24

−.14

−.10

(.11)

(.12)

(.12)

---

---

---

---

---

---

---

---

---

---

---

---

(% GDP, 2009)

Bailouts and nationalizations (% GDP, 2009)

−.93

−.51

(1.00)

(1.21)

---

1.36

2.39

2.21

(.40)

(1.66)

(1.48)

−.77

−.02

(.42)

(.79)

---

.77

.78

1.00

1.05

1.01

(.44)

(.37)

(.45)

(.51)

(.44)

−2.82

−5.27

−4.72

−2.70

−10.21

−12.40

(2.34)

(2.63)

(2.37)

(6.11)

(8.50)

(4.19)

Adjusted R2

.15

.22

.21

.54

.10

.24

Std error of reg

7.90

7.56

6.30

5.70

5.99

5.49

N

25a

25a

22c

17b

14c

14c

ΔGDP(1-4Q)

---

Intercept

a

Including only countries with OECD debt data and elections after 2008. Including only countries with OECD spending data and elections after 2008. c Excluding countries with major austerity programs (Iceland 2009, Hungary 2010, Ireland 2011). b

50

Figure 1: Election-Year GDP Growth and Incumbent Party Electoral Support, 2007-2011 15 Turkey 2007

10

Estonia 2007

Change in Incumbent Party Vote (%)

5 Norway 2009

Italy 2008

Slovak Rep 2010 Iceland 2007

0

Poland 2007

Ireland 2007

Spain 2008

Turkey 2011

U.S. 2008

-5 Japan 2009

-10

Portugal 2009

Portugal 2011

Iceland 2009 Germany 2009

-15

U.S. 2010

Finland 2011

Netherlands Austria 2010 2008 Spain 2011 Slovenia 2011

-20 Hungary 2010

-25

Ireland 2011

-30 -9

-6

-3

0

3

6

9

Real GDP Growth (%) in Year Before Election

12

51

Figure 2: Cumulative Growth and Election Outcomes in OECD Countries, 2007-2011 15 Turkey 2007

Estonia 2007

10

Change in Incumbent Party Vote (%)

5

Turkey 2011

Norway 2009

Spain 2008

0

Japan 2009 Portugal 2009 Germany 2009

-15

Ireland 2007

U.S. 2008

U.K. 2010

-5

-10

Poland 2007

Slovak Rep 2010

Finland 2011

U.S. Portugal 2010 2011 Spain 2011

Netherlands 2010

Austria 2008

Slovenia 2011

-20 Hungary 2010

-25

Ireland 2011

-30 -6

-3

0

3

6

Weighted Average GDP Growth (%) in Two Years Before Election

9

12

52

15

Figure 3: Discretionary Stimulus Spending and Incumbent Party Electoral Support, 2009-2011

10 Sweden 2010

Change in Incumbent Party Vote (%)

5 Canada 2011

0

Poland 2011

-5

Australia 2010

United Kingdom 2010

-10

Portugal 2011

Iceland 2010

U.S. 2010 Spain 2011

-15

Japan 2009 Germany 2009

Netherlands 2010

-20 Hungary 2010

-25

Ireland 2011

-30 -9

-6

-3

0

3

2009 Discretionary Stimulus (% of GDP)

6